Most of the Middle East’s FDI by number of projects, their value and jobs created in the last decade went to the GCC, led by the ‘trio’ of Saudi Arabia, UAE and Qatar, an Ernst and Young analysis found.
Launched to coincide with the Growing Beyond Summit 2012, currently held in Doha, Ernst and Young’s inaugural Middle East Attractiveness Survey is a detailed analysis of how foreign direct investment (FDI) into the region has evolved in the last decade.
The report combines annual FDI analysis since 2003 with a survey of 355 global and regional executives on their views about how and where investment across the Middle East will take place in the next decade.
The region has seen the number of annual FDI projects increase from 362 in 2003 to a peak of 1,070 in 2008. Project numbers fell in 2009 and 2010 as the global and regional economies took a step backwards but recovered again in 2011 with an increase of 8% to 928. The value of the investments in 2011 remained low compared to 2008 but again showed a modest recovery on 2010. Initial findings for the first six months of 2012 demonstrated a similar picture with investment project numbers and value flat or below that of the comparable period in 2011.
Despite the size of the projects declining as investors take a more cautious approach to large-scale projects given the recent political challenges, the region still has many positives as the long-term investment outlook from executives confirmed.
“The Middle East has many of the qualities that companies look for in an FDI destination: solid investment fundamentals, strong demographic trends and vast natural resources,” Jay Nibbe, Ernst and Young Markets Area Managing Partner for Europe, Middle East, India and Africa (EMEIA) commented.